Covid 19: Emergency VAT measures

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As part of the Government’s range of emergency measures to mitigate the impact of Covid-19,  financial assistance for business includes being able to defer or postpone some VAT payments. For a limited period businesses are free to choose to pay or not pay VAT without contacting or obtaining any agreement from HMRC.  If you normally pay HMRC by direct debit it is your responsibility to cancel the relevant payments.

The VAT payments which may be deferred are those which were due or are becoming due during the period from 20th March to 30th June 2020.  This is a temporary relief and VAT payments due on or after 1 July 2020 must be paid as normal. Any amounts which are deferred become a debt which must be settled by 31st March 2021.

Other matters to note are as follows:

  • Interest or penalties will not be charged on any tax which is deferred.
  • Although payments may be deferred VAT returns must be submitted in time
  • HMRC say they will be processing repayment returns and other claims as normal
  • VAT MOSS payments may not be deferred.

Further information is available at https://www.gov.uk/guidance/deferral-of-vat-payments-due-to-coronavirus-covid-19

There is ongoing dialogue between professional taxation bodies and HMRC to obtain further information and further updates will be made in due course.